1 Growth Stock Down 80% to Buy Right Now

The market has beaten this e-commerce stock down too far.The pet industry is a big business in the United States. The companion animal market grew by 8.2% annually from 2018 to 2025. People have pets for various reasons, and there is a strong emotional bond between most people and their furry, feathery, or even scaly family members. Given that, one might assume that pet-focused e-commerce giant Chewy (CHWY 1.71%) would be an obvious winner. Ironically, the stock has been anything but; shares have declined 80% from their all-time high in 2021. Plenty of growth stocks throughout history lost most of their value and never recovered. So, why should investors buy Chewy after its catastrophic tumble? Here is what you need to know. Image source: Getty Images Blame the bubble, not the business To be fair to Chewy stock, shares peaked during a broad market bubble. Chewy is far from the only stock to rocket to dangerous valuations that year. The stock traded at 7 times sales at its peak, a very lofty valuation for a business operating on razor-thin profit margins in a highly price-competitive e-commerce industry. Naturally, that bubble burst, and Chewy's staggering decline has dropped shares to just 0.8 times sales today. It's probably safe to say that the hot air has left the balloon. But during those five years, Chewy's business has continued to thrive. Trailing 12-month sales have more than doubled to $12.6 billion, including $487 million in free cash flow. It can be challenging to look past the stock's dramatic declines, but there's a growing and profitable business behind the curtain. ExpandNYSE: CHWYChewyToday's Change(-1.71%) $-0.41Current Price$23.82Key Data PointsMarket Cap$9.9BDay's Range$23.06 - $23.9352wk Range$23.06 - $48.62Volume372KAvg Vol7.7MGross Margin28.58% Strong key indicators point to better days ahead Chewy must stay on its toes amid intense competition from far larger retailers, such as Walmart and Amazon, and the abrupt departure of its CFO in May rattled the market. That said, this is a story of what comes next -- not what's already occurred. Chewy is showing some favorable signs for its future. For starters, Chewy ended the third quarter of 2025, its most recent report, with over 21 million active customers. That's a 4.9% increase versus a year ago, and a net addition of 250,000 customers from the prior quarter. In other words, Chewy is still picking up new customers at a pretty healthy pace. More importantly, Chewy is retaining customers. About 84% of net sales are from autoship orders. These recurring orders mean that the food, medicine, and other items your pets need are automatically delivered to your door. Shoppers don't need to think about buying them, making it less likely they will go elsewhere for those items. The stock currently trades at just over 15 times full-2025 earnings estimates, a compelling valuation for a company that analysts estimate will grow earnings by an average of 18% over the next three to five years. At this point, Chewy stock has fallen so far that investors will likely do well over the long term, even if the company falls a little short of expectations along the way.Read NextFeb 14, 2026 •By Adam Levy1 No-Brainer Growth Stock to Buy Now With $50Feb 8, 2026 •By Will HealyChewy Stock Is Quietly Becoming a Buy Again. Here's Why.Feb 4, 2026 •By James BrumleyIs This Once-Popular Growth Stock Finally Worth a Second Look in 2026?Feb 4, 2026 •By Geoffrey SeilerThe Best Stocks to Buy Right Now for FebruaryJan 27, 2026 •By John Ballard2 No-Brainer Growth Stocks to Buy Right NowJan 25, 2026 •By Marc GubertiRead This Before Buying Chewy Stock​About the AuthorJustin Pope is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and industrials. Prior to The Motley Fool, Justin was a business manager for an industrial company.TMFbeardedFiStocks MentionedChewyNYSE: CHWY$23.82 (1.71%) $0.41*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.